It’s no secret that the COVID-19 pandemic fundamentally altered the work landscape, especially when it comes to office jobs. In March 2020, millions of professionals began working remotely for the first time. Now, some may never have to return to a traditional office setting with companies, both large and small, reevaluating the usefulness of renting out office space. As a result, the coworking space is seeing a resurgence in popularity.
Even before the pandemic, coworking spaces offered a lot of great benefits to professionals, entrepreneurs, startups and even traditional companies alike. With flexible rental arrangements and all of the typical office trappings — high-speed internet, well-stocked break rooms, the latest equipment — on offer, coworking spaces simplify things during these uncertain times.
But will the coworking trend carve out a long-term foothold for itself? Here, we’re taking a look at the world of coworking spaces, from how they started to the pros and cons associated with them.
The Rise of Coworking Spaces
While many people weren’t familiar with the concept of coworking spaces until relatively recently, the setup’s origins can be traced back to the 1990s. In 1995, C Base — a hackerspace in Berlin, Germany — aimed to bring the tech-savvy together, allowing them to exchange knowledge and work collaboratively (or separately) on projects.
After C Base, similar projects emerged. For example, Sveavägen 9 in Stockholm, Sweden, opened in 1998, serving as the home of several companies during the dot-com boom. In 2002, Schraubenfabrik launched in Vienna, Austria, giving entrepreneurs a place to gather and work side-by-side.
But it wasn’t until 2005 that the first company officially centered around renting coworking spaces opened in California. Started by Brad Neuberg, San Francisco Coworking Space offered many of the classic perks we’re accustomed to today, but, at the time, a few things really set it apart from traditional office spaces. Namely, it provided flexibility to freelancers, entrepreneurs and others who perhaps didn’t want to commit in the long-term to renting our workspace.
Over time, coworking spaces have gained a significant foothold, especially in cities. Of course, the pandemic changed that trajectory quite a bit. Even WeWork, a giant in the industry, struggled to pay rent on its properties once shelter-in-place orders and social distancing made operating coworking spaces — and traditional office spaces — difficult, if not impossible.
Those coworking spaces that did make it through were primed for a reasonably quick recovery. “Nearly two years into the COVID-19 pandemic, roughly six-in-ten U.S. workers who say their jobs can mainly be done from home (59%) are working from home all or most of the time,” Pew Research Center, a nonpartisan Washington, D.C.-based “fact tank”, found.
If you don’t have room in your apartment or house for a functional home office, a coworking space might appeal to you, for example. Not to mention, having a separate workspace can do wonders for remote workers’ mental health and work-life boundaries.
But individuals aren’t the only ones seeing the benefits of coworking spaces. Startups that wanted to hedge their bets during their early stages have also found value in the coworking arrangement. For one, it gives these startups access to a traditional-style workplace at a lower cost and with much less commitment. Even larger companies, which are potentially torn between requiring in-office days or not, may find some financial reprieve in renting out coworking space, as opposed to resigning a traditional rental lease.
Today, demand for coworking spaces is incredibly high. Many of the hottest locations have waitlists for new members. On a daily basis, desk reservations typically fill up quickly. While not all coworking companies have reached pre-pandemic numbers just yet, the potential is certainly there.
How Coworking Spaces Work
Generally speaking, coworking spaces use membership-style models. If you’re interested in using a particular location — or, in some cases, any of a larger chain’s locations — you’ll pay a monthly fee to access the space. Once you’re a member, you’ll usually have the ability to reserve desk space. Based on the terms in your membership agreement, you’ll also be able to access the tools and other resources the coworking space offers.
Some coworking locations also boast drop-in options. In these spaces, membership isn’t necessary, but that does mean that space is often limited; reservations are first-come, first-serve. Still, for those with only an occasional need, it’s often worth exploring this immensely flexible option.
Once you enter a coworking space, you share a large office environment with other professionals, from freelancers and remote workers to entrepreneurs and startup teams. While you’ll usually have a designated desk area during your appointment time, other resources are typically shared.
The Benefits of a Coworking Space — and the Drawbacks
As with all work arrangements, coworking spaces come with some pros and cons. When it comes to advantages, the biggest is access to traditional workplace features that don’t fit into a home office — or fit into your home office budget. It’s also an excellent option for professionals who travel; having a functional work area while on the go is convenient, after all.
Coworking spaces also add a social element to otherwise independent jobs. If you’re looking to interact with some other folks throughout your otherwise solitary work day, the water-cooler chat — or potential for collaboration — of a communal workspace might appeal to you.
And, finally, there’s the comparatively more affordable cost. Usually, the price is far below what it takes to rent space in an office building. Plus, the commitment is minimal, giving startups and individuals some much-needed flexibility while they get their foot in the door, so to speak.
When it comes to drawbacks, the biggest might just be the lack of consistency. There’s no guarantee that you’ll get a desk, be able to access certain equipment whenever you need it, or reserve conference rooms on your preferred schedule. While a membership may come with some commitments in this arena, they’re typically limited.
Additionally, while the open, social environment may suit some work styles, it’s a hindrance for others. Open floor plans are common to coworking spaces, which means the desks you reserve are all sitting in the same area. As a result, interruptions and distractions might crop up — not unlike working in a library or your university’s cafeteria.
The bottom line? This setup may not be ideal for detail-oriented, heads-down work. The open floor plan setup can also raise some concerns about privacy; if you’re discussing proprietary information or new developments, you might be overheard by others from outside your team or company.
How a Coworking Space Impacts Employees
For companies turning to coworking spaces in lieu of traditional office environments, it’s critical to understand that this shift does impact your employees’ experiences. Coworking spaces may provide flexibility that your workforce wouldn’t find elsewhere. In turn, this might boost job satisfaction and productivity, all while improving work-life balance. Plus, coworking spaces offer more than a typical home office can provide. For example, most homes don’t boast business-grade WiFi access.
On the other hand, coworking spaces do come with some challenges. No one can really control the environment; if some equipment breaks, you’ll likely need to wait on the owners of the coworking space to fix it. The desk reservation system — often called hot desking — means your employees may not sit with their peers or teammates. Even worse, your team could be lumped in with distracting or noisy professionals from other companies.
So, Will the Coworking Space Trend Last?
Ultimately, coworking spaces will likely remain part of the landscape long-term. At a minimum, they’re a widely used resource among freelancers and professionals who travel, which could be enough to support the industry.
Additionally, the flexibility will make them an attractive option for entrepreneurs, startups and even some small businesses, allowing them to avoid the trappings of a long-term leased office space. However, as real estate investors struggle to fill traditional offices, adjustments to those offerings could alter the landscape further.
In fact, high commercial real estate availability makes it a tenant’s market, pushing prices down and leading to friendlier terms. If that trend continues, traditional offices may become more enticing, which means companies may slowly shift back to business-as-usual rentals.
While a change like this won’t spell total doom for coworking spaces, it will alter their place in the landscape, potentially making these communal spaces a haven for freelancers, remote employees and on-the-go professionals — much as they were pre-pandemic.
